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New-home sales hit highs in May

WASHINGTON — Sales of new homes rose in May to the highest rate since mid-2008, and purchases in the early spring were also higher than originally estimated, the government said Tuesday.

Sales increased 2.1 percent last month to an annual rate of 476,000, the U.S. Commerce Department said, providing more evidence of the robust recovery underway in the U.S. housing market.

In New Hampshire, more single-family homes sold in May than for that month in eight years, according to data released Monday by the New Hampshire Association of Realtors.

The number of residential sales in the state hit 1,361, marking an 11 percent increase from last year. It was the 18th consecutive month of year-over-year unit sales increases and the most units sold in May since 2005.

The median sales price in New Hampshire increased 5 percent from May 2012 to $215,900, the highest median price for the month since 2010. Sales volume in May, meaning the total dollars exchanged in those residential home sales, was $340.4 million, up 17 percent from last year and the largest for May since 2007.

Unit sales are 11 percent ahead of last year for the year to date through May, while median price is up 5 percent and sales volume ahead by 11 percent.

“I continue to believe that it is only responsible to remain guarded in our optimism, but it’s very fair to say that the market is consistently heading in a positive direction,” said NHAR President Bill Weidacher, a broker at Keller Williams Metropolitan Realty in Bedford.

Economists polled by MarketWatch had forecast national sales in May to reach an annual rate of 464,000.

Sales rose in May despite a reversal in mortgage rates that extended into June. The rate on a 30-year mortgage topped 4 percent for the first time in a year, up from 3.5 percent just a few months ago, according to the Mortgage Bankers Association.

Yet economists point out that rates remain extremely low by historical standards, and they don’t think sales of new homes will slow unless the economy does.

Richard Moody, chief economist of Regions Financial Corp., said “higher mortgage interest rates in and of themselves will not derail the housing market recovery.”

Sales of new homes leaped 40.7 percent in the Midwest and 20.7 percent in the Northeast to drive the gains. Purchases also edged up 3.6 percent in the West.